In this unprecedented time in human resources history, employment litigation landmines are both numerous and potentially costly for large and small businesses alike. Record-setting payouts in employment lawsuits and all-time highs in charges registered with the Equal Employment Opportunity Commission suggest that employees can not only be your greatest asset, but also your greatest liability. The difference lies in the strength of the human resources infrastructure that a company has in place to prevent claims including discrimination, wrongful termination, and wage and hour violations.
Common Employment Litigation Landmines
Incomplete Documentation of Employment Events – A comprehensive paper trail maintained by an employer can be the most protective tool to in the defense against erroneous claims of wrongful employment action. The documentation compiled by an employer should be strong enough to clearly tell the story of what happened pertaining to a given employment situation, even if the employer is not there to fill in the gaps. Though it is one of the most critical supervisory functions, documentation is also the one which can often get overlooked or sacrificed in lieu of other day to day tasks.
Inconsistent Application of Employment Policies – Employees should be treated fairly and consistently. Small business owners and managers must be willing to stand behind the compliant HR policies they have put in place, even if it is their best performer that must be counseled. Consistency should also extend to maintaining personnel forms that support employment policies, including an up-to-date employee handbook and signed handbook receipt page.
Poorly Trained Management – The supervisors and managers of a company are the front-line defense against employment litigation landmines. As agents acting on behalf of the business, they should be well-versed in current employment regulations, internal company policy, and human resources best practices. Investing in training for managers can increase the likelihood that they are acting in a consistent and compliant manner, in order to minimize the risk for the business (should an unexpected claim of discrimination or wrongful termination occur). It is often taken for granted that supervisors or managers have been trained in the past and are comfortable and confident in their approach to employment decisions including hiring, disciplining, documenting, and appraising employee performance.
Not only can fortifying the foundation of a small business’ human resources function protect against common litigation landmines, but it can also foster a company culture of fair treatment of employees. In turn, this should increase the positive perception of the company by employees and may result in higher levels of job satisfaction, increased productivity, and reduced employee turnover. It should also result in developing or reinforcing the company’s reputation in the marketplace as an employer of choice.